Fragile and Resilient Trust: Risk and Uncertainty in Negotiated and Reciprocal Exchange

Both experimental and ethnographic studies show that reciprocal exchanges (in which actors unilaterally provide benefits to each other without formal agreements) produce stronger trust than negotiated exchanges secured by binding agreements. We develop the theoretical role of risk and uncertainty as causal mechanisms that potentially explain these results, and then test their effects in two laboratory experiments that vary risk and uncertainty within negotiated and reciprocal forms of exchange. We increase risk in negotiated exchanges by making agreements nonbinding and decrease uncertainty in reciprocal exchanges by having actors communicate their intentions. Our findings support three main theoretical conclusions. (1) Increasing risk in negotiated exchange produces levels of trust comparable to those in reciprocal exchange only if the partner's trustworthiness is near-absolute. (2) Decreasing uncertainty in reciprocal exchange either increases or decreases trust, depending on network structure. (3) Even when reciprocal and negotiated exchanges produce comparable levels of trust, their trust differs in kind, with reciprocal exchange partners developing trust that is more resilient and affect-based.